1997 Congressional Hearings
Intelligence and Security

Testimony before the Senate Select Committee on Intelligence
September 18, 1997
by Harry Wu
Executive Director, The Laogai Research Foundation
Research Fellow, Hoover Institute
Today China is a nation standing at the crossroads of history. It is a nation that, as its people collectively ponder which way to go, will become most important international issue the United States will have to deal with in the next century.
As you think of China, I ask you to picture China's Communist regime as a gigantic building. For most of the past four decades it looked ugly and terrible from the outside because of its disastrous poverty, red horror and uncooperative attitude toward America—an attitude which made it our enemy in Korea and Vietnam. But the ugly building was stable, its pillars were strong and the majority of the Chinese people believed that living in it, under the Communist party’s leadership, was their best hope for future prosperity.
Communism in China can be divided into two styles—Deng’s (from 1979 to the present) and Mao’s (from 1949 to 1979). Much has been made of the differences between the system Deng created and the one Mao Zedong left behind. True, the two did differ in their methods of rule. The biggest of these differences is that Mao never allowed a restoration of capitalism—something which Deng permitted in his later years. But, in essence, the two systems do not differ. At its core, the Chinese communist system of today relies on the same politics of totalitarian despotism and the economics of public ownership that Mao used to impose his will on China.
Deng gave the Chinese people a break economically because Mao’s disastrous policies left him with no other choice. The economic and political relaxation that Deng allowed has caused some to think that his rule was fundamentally different from Mao’s.
It was more than 70 years ago that Deng, then a factory worker living in France, joined the Communist Party and vowed to devote his life to fighting for communism in China. In the last 20 years of his life—roughly the years he spent as China’s paramount ruler—he did violate basic doctrines of communism. Under the slogan of "socialism with Chinese characteristics," and in the name of "developing a system of a socialist market economy," Deng and his Communist Party permitted a restoration of capitalism and invited foreign capital to flood into China.
But today’s Chinese communist system is still characterized by totalitarianism and a massive bureaucracy which oversees the public ownership of the primary means of production. Today’s China remains under the firm control of the Chinese Communist party. China is no "former Communist country," as President Clinton has been quoted saying. Even with the continuation of Deng’s economic reforms, the average Chinese enjoys no right to free speech. Consider the plights of Wei Jingsheng and Wang Dan. Both are currently serving their second terms in prison—one for 14 years, the other for 11 years—just for speaking the truth.
Under Deng’s rule the appearance of this Chinese Communist building has changed. As Western technology and capital have flooded in, the building has taken on a colorful appearance, but the pillars that support it are cracking because the concept of Communism as a guiding principle is already on the trash heap of history. This ideological void constitutes a crisis in the minds of ordinary Chinese. For thousands of years, dynasty after dynasty, the Chinese have maintained a tradition of following a leader with "the mandate of heaven." Today’s communist leaders have no such mandate. The pillars continue to crumble.
Other cracks in the building’s pillars are easy to see. Today China’s urban unemployment rate stands somewhere between 7 and 10%. This high figure stands to rise as the government moves ahead with plans to address debt problems at its banks by cutting lose unprofitable state-run enterprises.
Compounding this unemployment problem is another crack that runs through the agricultural sector, where 70 to 80% of the population lives. Agricultural production has come to a bottleneck. If the communist leaders can not solve the ownership problem—who owns the land—then the peasants will no longer be interested in developing and improving production. Yet if there is too much improvement in production, millions more agricultural workers will lose their jobs and migrate to the urban areas. Some 150 millions have done so already. These people, the government knows, are a threat to stability.
This question of domestic control reveals another crack in the pillars. The Chinese Communists believe in Mao’s saying that "power comes from the barrel of the gun." The person who controls the gun is the boss. Mao and Deng were both soldiers who naturally commanded the respect of the People’s Liberation Army. Jiang Zemin has had no career with the PLA, but he is trying to control it. It is a hard job. Can he succeed?
Since the establishment of the Chinese Communist Party in 1921, its internal power struggles have never ceased. Most of the CCP’s leaders have been killed, not by foreign enemies, but by their own comrades. Because the CCP is a dictatorship system, the concept of one country, one party, one leader, follows. Recently party leaders have tried to present themselves to the world with the friendly face of a collective leadership. We believe this at the risk of ignoring history. Jiang could be on his way to becoming China’s third generation communist leader, but if he shows weakness, others will try to topple him. I don’t think we can predict what the outcome of the party’s internal power struggle will be, but it is clear that it will become more heated. As the central planning economic system continues to break up and regional power bases grow, the political crisis will become more apparent. I think it could lead to a civil war in the next century.
Another crack in the pillars runs through the people themselves. Having endured decades of oppression under the communists, the people, sooner or later, will cry out. Today there is a lot of underground literature being circulated in China. Such publications are deeply critical of the ruling authorities.
The final crack I would like to point out to you can be followed out of China to nations such as this one. China’s economy has become heavily dependent on foreign trade and investment. Today, 48 % of the goods China produces for export are made by foreign or joint-venture enterprises. These foreign and joint ventures employ some 17 million people. In a nation that has traditionally prided itself on its self-reliance, this sort of foreign involvement in the economy has no historical precedent.
Considering all of the cracks in this colorful communist building, it could, just like the Berlin Wall, collapse in one night. But even if this were to happen, it would not mean that a free, democratic and peaceful nation will rise out of the rubble. I believe that tyrannical systems will persist in China for at least the next 100 years.
To understand why this will happen, one need only to take a close look at the current regime and see the line connecting it with China’s ancient past. Marxist-Leninist ideology in today’s China is but a thin coat covering the body of a traditional and tyrannical Chinese dynasty. Communist political dictatorship system is in many ways the same as the former dynasty systems. Despite his reforms, a Communist emperor-without-a-crown like Deng Xiaoping controls the government, military forces, media and education system—the whole country.
Today, "nationalism" and "patriotism," instead of communism/socialism have become the major political slogans of the regime.
Today the state ownership system is beginning to break a little. Such changes could are taking the Chinese into unknown territory where economic diversity could lead to the creation a diverse political environment. "Could" if the despots in Beijing would allow it.
Think of China as a bird with two wings—politics and economy. The bird cannot fly with either of its wings tied up. The Soviet bird, with its economic wing bound up, desperately flapped its political wing, only to crash. What about the Chinese communist bird?
Early reports from the current Communist Party congress show a leadership that wants to institute new economic reforms, but not at the expense of its monopoly on power or its control of the primary means of production.
Genuine economic transformation can only be achieved through the transfer of ownership of means of production to the private sector, but it is clear that the party leaders are not considering allowing the 800 million peasants who live in rural areas to own the land they farm or giving all the ordinary people of China more say about where they live and work.
In other words, the Chinese bird is struggling and will continue to struggle. There are people in this country who argue that it could gradually fly upwards if the political wing begins to move in unison with the rapidly beating economic wing. Personally, I believe that as long as the Chinese communists maintain their system of tyrannical, one-party rule, the two wings will resist cooperation and that this bird will die of exhaustion.
Still, to many of the people who have who have business interests in China, this is not apparent. They will happily tell anyone who will listen that China is well on its way to becoming an economic giant. I have to agree with these people when they make this argument. They, in turn, usually agree with me when I say that China is also on its way to becoming a military giant in the next century. If the totalitarians in Beijing have their way, these conditions of ready cash and military power will someday make them into a communist giant. If this comes to pass, American policymakers in the next century will have to make difficult decisions regarding emerging communist giant.
I find it highly ironic that the United States can project such strong intolerance toward the regimes in North Korea and Cuba and yet seem to find the dictators in Beijing acceptable. If the Soviet Union was the "Evil Empire," then China is the "Angel Empire." As such, China can enjoy the Most Favored Nation trading status which the Soviet Union was never granted.
The shrewdness of Deng Xiaoping and his successors cannot be denied. The rapid growth of capitalism they have allowed has given Communist China enough economic leverage to buy off all external pressure. This means Western money and technology are the fuel in the tank which is driving the Chinese Communist vehicle.
As they make deals for more of this fuel with Western CEOs, China’s contemporary leaders are quick with a handshake and a smile for the cameras. But behind this fašade of openness, underneath their Western suits, China’s leaders keep in their hearts a deep-seeded fear of real democracy and the human rights that go with it. When they are confronted about this question, these leaders reflexively say that Asian concepts of human rights differ from those of the West. It is a sad but all-too-common thing to hear their Western partners echo this convenient lie.
Another convenient lie is the one I am hearing in some American intellectual and political circles. It has to do with the absurd idea that village-level elections in China are somehow leading the nation toward democracy.
Elections in China are not new. They actually were taking place as early as the 1950s to select delegates to the People’s congress. Everyone there understands that elections can be held. They have given the people the impression that there is some measure of democracy.
The Chinese government, of course, loves to hear these claims repeated in the West. They may hear them more often as they move ahead to expand their village election programs.
This brings me to what I believe is the fundamental question about the village elections: If they are such a good idea, why aren’t there elections in the cities? Why not hold the elections only in the villages?
The answer is that the Chinese Communists have not relaxed their grip on power in the cities, while in the countryside they need to do so because of the crisis they are facing there.
In the villages, people live under People’s Commune system that controlled their lives and the economy completely. In term of political control, the People’s Communes model is a good thing for the Communist Party. All the peasants work and lived like slaves, with no rights to say anything about production. This caused a crisis for production. Deng addressed this crisis by creating a so-called "contract" system by which the peasants could farm individual plots, which the state still owns. So the People’s Commune no longer controls everything, as it did in Mao’s day. Farmers can even borrow money to support their harvesting.
The planned economic system in agriculture has been broken. The Chinese Communist leaders, clever as they are, have realized that they need a new system to manage and control this pressure in the countryside. This is what leads them to the concept of village elections.
The conclusion is very simple: Under the current dictatorship system, the party controls the economy, the military—everything. If you believe these village elections are spreading democracy, you are actually helping the communist propaganda machine and helping the Communist Party stay in power.
There were also elections in the Soviet Union and more recently have been some in Iraq. I know of no one who believes these exercises constitute steps toward freedom. So why do some people today claim that village elections in China will lead to true democracy?
The only thing clear about the current U.S. strategy to engage China comprehensively is that it is not working. The idea is to talk to China on many fronts so that no single problem dominates. But this piecemeal approach has been easy for the Chinese to shrug off. Whatever the issue, from software piracy, to weapons proliferation to Taiwan, the U.S. is not having much luck at influencing Chinese behavior.
After the United States, China has become the world’s number-two nation in terms of foreign investment. The money not only benefits common Chinese but also supports the communist government. It gives them the hard currency to hire hundreds of laid-off military experts from the former Soviet Union.
In China, the only force that will really change things is internal pressure. China's leaders know that it was the coalition of intellectuals, workers and the church that brought down Communism in Poland. In other words, the most important pressure for change on China's leaders is not external pressure, which China's economic growth deflects, but internal pressure, which Chinese leaders have learned to control to a large extent.
But this control of internal pressure does not happen completely in the dark. As China has opened its doors to the world, the full truth about the criminality of Chinese communism has begun to emerge.
At the heart of this system to control internal pressure is the Laogai, which means, literally, "reform through labor." I think "politically imposed slavery system," is a better definition. The Laogai shares many characteristics with Stalin’s gulag and Hitler’s concentration camps. If this was 1937 and somebody here wanted to talk about rumors of concentration camps in Nazi Germany, how many people would be interested?
From 1933 to 1937 Germany's economy expanded by 73% and most of the Germans generally agreed with Hitler’s policies. The West, meanwhile, cooperated with Germany companies and nobody boycotted the 1936 Olympic Games in Berlin. It was not the until the liberation of the concentration camps and the opening of the Nazi’s own files that world fully understood the horrors on those camps. Then the world learned the high price of appeasement.
But while the gulag and concentration camps have passed into history, the Laogai camps remain. The Laogai camps are proof that what the Beijing authorities really fear is democracy and human rights. The Laogai is the point at which American engagement with China should begin.
If we want to see the end of Communist system in China we have to talk first about the Laogai. The Laogai is the Beijing regime’s most fundamental tool for controlling internal pressure.
And to those who would argue that the United States has no leverage with which to push for changes in the Laogai or anywhere else in China, I say that the Chinese have done an excellent job creating the illusion that they have the upper hand.
The truth is that today China needs the United States much more than the United States needs China. While some American feel they need access to China’s markets to ensure future success, the Chinese nation as a whole must keep the American dollars, the American technology, flooding in to maintain growth. It is this growth which allows the average Chinese to forget about the Communist Party’s lost moral authority—which allows the Chinese Communists to prepare their troops for the day when the growth stops.
There is a danger that the world's most populous nation and the U.S. could wind up in a kind of 21st century cold war. That would pose an enormous strategic problem for the U.S. and put billions of dollars invested by American companies at serious risk. Nearly fifty years ago there was a debate in the U.S. about "who lost China." I believe we will have another debate soon. The question will be: "who rebuilt Communist China."